New Research from Urban Institute Details How Nonprofits Can Bolster Financial Stability
The Urban Institute published a new case study that analyzes how Whitman-Walker redeveloped a real estate asset into a revenue stream and outlines a scalable and sustainable financial model for nonprofits that own land.
Community-based nonprofit organizations like Whitman-Walker fill crucial gaps, yet for many, keeping the lights on is a serious challenge. However, one underexplored opportunity to fortify financial stability is leveraging the value of the real estate that nonprofits own. Nonprofit organizations in the United States currently hold more than $4 trillion worth of real estate. Many face pressure to cash in on their holdings without realizing an alternative solution exists.
“Our research shows how Whitman-Walker pursued a unique means of redeveloping its flagship health center,” said Brett Theodos, senior fellow at the Urban Institute, and the report’s lead author. “By engaging mission-aligned development and financing experts, creating a streamlined governance process for its board, and taking the time to bring together partners, Whitman-Walker gained more flexibility and control while establishing a sustainable revenue stream to expand services. The success of Whitman-Walker’s redevelopment venture crystallizes several lessons for nonprofits seeking to leverage their land.”
Funded by Emerson Collective, the case study describes a novel approach for nonprofits to generate predictable revenue streams from their real estate assets and showcases how Washington, D.C.’s Whitman-Walker, a community-centered enterprise committed to advancing social justice and equality through health, was able to redevelop its flagship location, the Elizabeth Taylor Medical Center into LIZ by partnering with a private, for-profit, local real estate company, Fivesquares Development, and convert their real estate asset into a multi-use development that will financially support the nonprofit’s mission.
"LIZ afforded us an opportunity to stay on the 14th Street corridor where our patients and clients know where to find us while also creating impactful long-term financial sustainability,” said Naseema Shafi, CEO at Whitman-Walker Health and Ryan Moran, CEO at Whitman-Walker Health System. "We are truly grateful for our phenomenal partners Fivesquares Development and Emerson Collective who value and support our mission of care and service and who have helped our organization to grow in such a meaningful way."
Whitman-Walker, with its development partner, Fivesquares Development, supported by a local bank and philanthropic partners, executed a plan to redevelop the land into a new structure where Whitman-Walker itself is a rent-paying tenant. The structure also includes ground-level retail, and luxury and affordable inclusionary housing units that aligned with Washington, D.C. requirements. Through this work, Whitman-Walker was able to identify mission-aligned partners, manage the risks of the joint venture, establish a sustainable future funding stream and expand its service portfolio.
“Liz is a replicable model of how the nonprofit, for-profit and philanthropic sectors can come together to empower community-based organizations to control their own destiny and create long-term viability and impact through creative finance and genuine, shared decision-making,” said Andrew Altman, co-founder of Fivesquares Development. “Fivesquares was honored to have been selected by Whitman-Walker as their partner to support realization of their vision.”
“Emerson Collective was thrilled to fund this important study, which provides useful insights into ways nonprofits providing essential services can improve their financial sustainability,” said Dan Tangherlini, Managing Director at Emerson Collective. “We are hopeful that this research will help educate nonprofits on the benefits of real estate deal structures that are inclusive of community partners and nonprofits, and this project is a clear demonstration of the value provided for each party that uses this trailblazing model.”
“This innovative real estate venture has its genesis in an organization-wide commitment to greater financial sustainability,” said Don Blanchon, CEO of Wasque Advisors and former CEO of Whitman-Walker Health and Whitman-Walker Health System. “Not just the next five to ten years but for the next 30 or more. In our final analysis, the venture’s long-term impact on Whitman-Walker’s mission and financial health far outweigh the risks associated with redevelopment.”
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.